GBP/JPY Extends Decline to 156.00

The decline that started on Thursday after the Bank of Japan decided to leave monetary policy unchanged in the GBP/JPY pair continued on Friday. The pair dropped further and bottomed at 156.06, the lowest since April 19.

So
far, the area around 156.00 capped the decline. Price rebounded and
recently reached 156.72 and it was trading at 156.50/55, down 120 pips
from yesterday’s closing price.

GBP/JPY dramatic decline

From
the level it had before the BoJ decision the pair has fallen more than
500 pips, partially erasing gains from the previous week when it rallied
from 153.50 to 161.00. Still the pound holds significantly above 2016
lows that are located at 151.50/60.

In the monthly chart,
GBP/JPY it about to post the lowest close since August 2013. If it ends
around current levels, it would be a decline of 550 pips; on the
positive side for the pound, it would be far from the lows. The trend of
the chart continues to point to the downside.

It is the fifth
monthly decline out of the last six months. In April, the decline was
because of a stronger yen, and during the previous months, the yen was
also a resilient currency, but the pound was among the worst performers
in the market, amid Brexit fears and monetary policy expectations.